Important Facts

Is Life Insurance Really Affordable?

Most people believe life insurance is important but that it's way too expensive. Don't be left in the dark, take a closer look and check out some misconstrued myths.

Affordable Life Insurance: Dispelling the “Too Expensive” Myth

Think life insurance is too expensive for you? Think again. An eye-opening study just might prove you wrong. Affordable life insurance may need to be a part of your financial planning.

Before we talk numbers, let's talk about life insurance beliefs. According to the nonprofit Life Happens, the insurance industry research group LIMRA, most people believe it is important to have life insurance. Yet, those same people don't buy life insurance either because they believe it is too expensive or they have other financial priorities. Let's take a closer look. Do those life insurance beliefs hold any water?

Belief #1: I can't afford life insurance because it is too expensive.

In Life Happens' 2015 Insurance Barometer Study more than 80 percent of Americans overestimate the cost of a life insurance policy.Those under 25 years of age were the worst at overestimating. When asked what they thought a $250,000 term life insurance policy would cost for a healthy 30-year-old, individuals under the age of 25 guessed $1,000 - almost 10 times the actual cost of $150 a year. Worse yet, almost one in five people in that age group guessed the same policy would cost $3,000 or more.

Looking at a broader age group, most Americans estimate the annual premium to be about $400. Actually, the premium is closer to $150 annually. Yes, you heard that right: $150 annually, or roughly $12.50 a month. If you buy only one latte a week from your local coffeehouse you'd spend close to $14.00 each month.

As you can see, affordable life insurance is possible. You just have to make it a priority, which bring us to the second major belief.

Belief #2: I can't afford life insurance because I have other financial priorities.

The other reason most people don't buy life insurance is other financial priorities. These priorities may include basic living expenses, or extras like Internet and cable, paying off consumer debt, and saving for retirement.

These are the priorities of fiscally-responsible adults. Who can argue with them? However, rather than dispute the priority ranking, consider how these priorities would be met if you or another wage earner in the family died prematurely. When you think about loved ones struggling to maintain their standard of living, suddenly $12.50 per month seems pretty doable.

Plus, you don't have to buy a million dollars of coverage. Even a small benefit amount would prove invaluable in helping your loved ones transition during a time of crisis. It's better to have some life insurance than none at all.

A few more thoughts …

So now we know that life insurance can be much more affordable than first imagined and that life insurance is really another important piece of the financial puzzle along with basic living expenses and saving for retirement

Life insurance can help replace lost income, pay off a mortgage, leave an inheritance, and of course, cover final expenses and burial costs. That's a pretty versatile list.

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All Learning Center articles are general summaries that can be used when considering your financial future at various life stages. The information presented is for educational purposes and is meant to supplement other information specific to your situation. It is not intended as investment advice and does not necessarily represent the opinion of Protective Life or its subsidiaries.

Learning Center articles may describe services and financial products not offered by Protective Life or its subsidiaries. Descriptions of financial products contained in Learning Center articles are not intended to represent those offered by Protective Life or its subsidiaries.

Neither Protective Life nor its representatives offer legal or tax advice. We encourage you to consult with your financial adviser and legal or tax adviser regarding your individual situations before making investment, social security, retirement planning, and tax‐related decisions. For information about Protective Life and its products and services, visit www.protective.com.

Companies and organizations linked from Learning Center articles have no affiliation with Protective Life or its subsidiaries.

Affordable Life Insurance

This article is about affordable life insurance. It shows how cheap life insurance can be. Most people believe there are no low cost life insurance options. There are many different types of life insurance; many of which might be more affordable than you think. Protective Life explains how affordable whole life insurance can be in this article.

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